What are you waiting for?
iDeCo is probably the best investment option for almost everyone who is planning to stay in Japan until retirement.
It gives you a decent tax break, tax-free investing, and a mostly tax-free payout at the end. It forces you to invest regularly over the long term and doesn't let you touch your money until you are 60 years old.
I'm a huge fan.
If you already have an iDeCo account, congratulations. You're part of a tiny minority of people in Japan.
iDeCo might not be a good fit for some people.
- If you are planning to leave Japan well before you hit 60, iDeCo might not be suitable for you.
- If you are not paying into the national pension scheme, you cannot open or pay into an iDeCo account.
- If you are a US citizen under 50, iDeCo might not be a great option yet.
- If you don't currently pay income tax, iDeCo is much less attractive (but might be worth doing for the tax-free investing).
- If you are enrolled in certain company DC pension schemes (check with HR to be sure, as some schemes also allow you to have a personal iDeCo account while others don't).
- If you are over sixty years old.
If you are not in one of the six categories above, I really think you should consider opening an iDeCo account. It's relatively straightforward, you can 'set and forget' it, and you'll likely end up much better off in the long run.
There are a few useful iDeCo resources in English.
The RetireJapan iDeCo page has a quick summary of the system.
The official iDeCo site now has an English version! This is great. Someone pointed it out the other day in the RetireJapan forum and I was really pleased to find it's actually quite good :)
The RetireJapan Guide to iDeCo is still available for the launch price of 1,000 yen, but the price will go up on Thursday when the next Guide (to NISA) launches. If you were thinking of picking up a copy or know someone that might benefit from it, you have three days before the price goes up.
I was finally able to open my own iDeCo account this year (public servants/mutual aid association members finally became eligible from January this year) so I'll be doing a round-up/report on how it's going next week.
How about you? Do you have an iDeCo account? How are you getting on with it? Any good reason not to open an account that we didn't mention?